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What about SEZ?

They don’t say much about SeZ these days. In truth the SEZ policy of the government has run into rough weather. There is a hiatus between its objectives and actual achievements. The SEZ Act came into effect from February 16, 2006. And yet nobody sees in SEZ a panacea for job creation despite huge subsidies industrialists get in SEZ.

India continues to suffer from high incidence of poverty, unemployment and under-employment. SEZ is no answer to unemployment and under-employment. The agricultural sector’s contribution to GDP is around 16 percent, but around 55 percent of the labour force depends on this sector. This shows how poor the rural people are. Yet, government’s economic policy often ignores this harsh reality.

Citing examples of China and other countries the government stated on more than one occasion that SEZ would play a positive role and contribute to rural prosperity. There is a need for diversifying agriculture and rural economy to enhance employment opportunities and income levels of the rural people. Priority should be given to value added items and food processing industry. Infrastructure facilities need to be enhanced. On paper, the SEZs are expected to achieve all these goals. Hence, they are offered sops despite resistance by SEZ affected farmers whose lands were acquired in the first place.

But, what is the reality? In October 2011, there were 583 approved SEZs, but the number of operational SEZs was just 143. No doubt the exports from SEZs are ‘impressive’. In 2003-04, their exports formed 4.72 percent of total exports of the country. This percentage increased to 25.07 by 2011-12.

But, this increase has not benefited the rural population at all. The reason: the SEZs concentrate on IT and ITES industries. The employment opportunities are only for the skilled people.

The land acquisition policy for SEZ is also faulty. There is no fair compensation. Some of the lands acquired for SEZ remain unutilised for years. Then, SEZs are concentrated in Karnataka, Tamil Nadu, Andhra Pradesh, Maharashtra, Gujarat and Kerala, contributing very little to reduction in regional imbalance in Development which again fuels regionalism and parochialism all the time, sometimes leading to ethnic and communal riots.

Frontier
Vol. 45, No. 51, June 30 -Jul 6, 2013

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